Resource Estimation Update and Technical Report · 2017. 11. 24. · Houston Lake Mining Inc....

REPORT NO 151-08638-00_RPT-02_R2

RESOURCE ESTIMATION UPDATE AND TECHNICAL REPORT PAK LITHIUM PROJECT RED LAKE MINING DISTRICT, ONTARIO

MAY 2016

Houston Lake Mining Inc.

Project no: 151-08683-00_RPT-02_R2 Issue Date: May 10, 2016 Effective Date: March 4, 2016 Prepared by: Todd McCracken, P. Geo. – WSP Canada Inc. 2565 Kingsway, Unit 2 Sudbury, ON P3B 2G1

Phone: +1 705-674-0119 Fax: +1 705-674-0125 www.wspgroup.com

RESOURCE ESTIMATION UPDATE AND TECHNICAL REPORT

PAK LITHIUM PROJECT

Red Lake Mining District, Ontario

S I G N A T U R E S

PREPARED BY

“Original signed and stamped by Todd McCracken, P.Geo.” Todd McCracken, P. Geo. Manager - Geology

i

Resource Estimation Update and Technical Report WSP Houston Lake Mining Inc. No 151-08683-00_RPT-02_R2

R E V I S I O N H I S T O R Y

Rev. No Issue Date Prepared by Description of Revision

0 April 22, 2016 Todd McCracken First draft for Client review

1 May 6, 2016 Todd McCracken For Client review

2 May 10, 2016 Todd McCracken Issued to Client

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WSP Resource Estimation Update and Technical Report No 151-08683-00_RPT-02_R2 Houston Lake Mining Inc.

TABLE OF CONTENTS 1 SUMMARY...................................................................................... 1

1.1 GEOLOGY ............................................................................................................. 1

1.2 CHANNEL SAMPLING AND DIAMOND DRILLING ............................................ 2

1.3 RESOURCE ESTIMATION ................................................................................... 2

1.4 RECOMMENDATIONS ......................................................................................... 4

2 INTRODUCTION ............................................................................. 5

3 RELIANCE ON OTHER EXPERTS ................................................ 6

4 PROPERTY DESCRIPTION AND LOCATION ............................... 7

4.1 LOCATION ............................................................................................................ 7

4.1 MINERAL DISPOSITION ...................................................................................... 7

4.2 TENURE RIGHTS ................................................................................................. 7

4.3 ROYALTIES AND RELATED INFORMATION ..................................................... 9

4.4 ENVIRONMENTAL LIABILITIES ........................................................................ 12

4.5 PERMITS ............................................................................................................. 12

4.6 OTHER RELEVANT FACTORS ......................................................................... 12

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY.............................. 13

5.1 ACCESS .............................................................................................................. 13

5.2 CLIMATE ............................................................................................................. 15

5.3 INFRASTRUCTURE ............................................................................................ 15

5.4 SITE TOPOGRAPHY, ELEVATION, AND VEGETATION ................................. 15

iii


6 HISTORY ...................................................................................... 16

6.1 ONTARIO GEOLOGICAL SURVEY PROGRAMS ............................................. 16

6.2 HISTORIC EXPLORATION ................................................................................. 16

7 GEOLOGICAL SETTING AND MINERALIZATION ..................... 19

7.1 REGIONAL GEOLOGY ....................................................................................... 19

7.2 PROJECT GEOLOGY ......................................................................................... 21

7.3 MINERALIZATION .............................................................................................. 25

8 DEPOSIT TYPES .......................................................................... 30

9 EXPLORATION ............................................................................ 34

10 DRILLING ..................................................................................... 36

10.1 2013 DRILL CAMPAIGN ..................................................................................... 36

10.2 2014 DRILL CAMPAIGN ..................................................................................... 40

10.3 2015 DRILL CAMPAIGN ..................................................................................... 44

10.4 QP’S OPINION .................................................................................................... 48

11 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................................................................... 49

11.1 2013 SAMPLE PREPARATION .......................................................................... 49



11.4 2013 ANALYTICAL PROCEDURE ..................................................................... 50



11.7 2014 QUALITY ASSURANCE / QUALITY CONTROL (QA/QC) ....................... 53

11.8 2015 QUALITY ASSURANCE / QUALITY CONTROL (QA/QC) ....................... 59

11.9 QP’S OPINION .................................................................................................... 62

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12 DATA VERIFICATION .................................................................. 63

12.1 SITE VISIT ........................................................................................................... 63

12.2 INDEPENDENT SAMPLING ............................................................................... 63

12.3 DATABASE VALIDATION .................................................................................. 63

12.4 QP’S OPINION .................................................................................................... 63

13 MINERAL PROCESSING AND METALLURGICAL TESTING....................................................................................... 64

13.1 ELECTRON MICROPROBE STUDY OF SPODUMENE FROM THE PAKEAGAMA LAKE PEGMATITE ............................................................ 64

14 MINERAL RESOURCE ESTIMATES ........................................... 68

14.1 DATABASE ......................................................................................................... 68

14.2 SPECIFIC GRAVITY ........................................................................................... 69

14.3 TOPOGRAPHIC DATA ....................................................................................... 70

14.4 GEOLOGICAL INTERPRETATION .................................................................... 71

14.5 EXPLORATORY DATA ANALYSIS ................................................................... 79

14.6 SPATIAL ANALYSIS .......................................................................................... 81

14.7 RESOURCE BLOCK MODEL ............................................................................. 81

14.8 RESOURCE CLASSIFICATION ......................................................................... 84

14.9 MINERAL RESOURCE TABULATION .............................................................. 84

14.10 VALIDATION ....................................................................................................... 91

14.11 PREVIOUS ESTIMATES ..................................................................................... 97

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15 ADJACENT PROPERTIES........................................................... 98

16 OTHER RELEVANT DATA AND INFORMATION ....................... 99

17 INTERPRETATIONS AND CONCLUSIONS .............................. 100

18 RECOMMENDATIONS ............................................................... 101

19 REFERENCES ............................................................................ 102

20 CERTIFICATE OF QUALIFIED PERSON .................................. 104

T A B L E S

TABLE 1.1 PAK LAKE RESOURCE SUMMARY ...................................................... 3

TABLE 4.1 SUMMARY OF MINERAL DISPOSITION .............................................. 9

TABLE 6.1 PROPERTY SUMMARY ....................................................................... 17

TABLE 9.1 2015 CHANNEL LOCATION SUMMARY ............................................. 34

TABLE 9.2 2015 CHANNEL RESULTS SUMMARY ............................................... 35

TABLE 10.1 DRILL COLLARS .................................................................................. 37

TABLE 10.2 2014 DRILL SUMMARY........................................................................ 41

TABLE 10.3 2015 DRILL RESULTS ......................................................................... 45

TABLE 11.1 2013 SAMPLE PREPARATION PROCEDURE - ACME ...................... 49

TABLE 11.2 2014 SAMPLE PREPARATION PROCEDURE - ACME ...................... 49

TABLE 11.3 SAMPLE PREPARATION PROCEDURE – ACTLABS AND AGAT..................................................................................................... 50

TABLE 11.4 2013 ANALYTICAL METHODOLOGY .................................................. 51

TABLE 11.5 ANALYTICAL DETECTION LIMITS ...................................................... 51

TABLE 11.6 2014 ANALYTICAL METHODOLOGY - ACME .................................... 52

TABLE 11.7 2014 ANALYTICAL DETECTION LIMITS - ACME ............................... 52

TABLE 11.8 2015 ANALYTICAL METHODOLOGY – ACTLABS AND AGAT..................................................................................................... 53

TABLE 11.9 2015 ANALYTICAL DETECTION LIMITS - ACTLABS AND AGAT..................................................................................................... 53

TABLE 11.10 COMPOSITION OF STANDARDS ....................................................... 58

TABLE 11.11 COMPOSITION OF STANDARDS ....................................................... 61

TABLE 12.1 CONVERSION FACTORS .................................................................... 63

TABLE 14.1 DATABASE SUMMARY........................................................................ 68

TABLE 14.2 PAK SPECIFIC GRAVITY SUMMARY ................................................. 70

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TABLE 14.3 WIREFRAME SUMMARY ..................................................................... 72

TABLE 14.4 SAMPLE SUMMARY BY DOMAIN ....................................................... 79

TABLE 14.5 GRADE CAPPING SUMMARY BY DOMAIN ....................................... 80

TABLE 14.6 COMPOSITING SUMMARY BY DOMAIN ............................................ 81

TABLE 14.7 SUMMARY OF PARENT BLOCK MODEL ........................................... 82

TABLE 14.8 SEARCH ELLIPSE SUMMARY ............................................................ 83

TABLE 14.9 ESTIMATION CRITERIA SUMMARY ................................................... 83

TABLE 14.10 UIZ MEASURED RESOURCE GRADE TONNAGE ............................. 85

TABLE 14.11 UIZ INDICATED RESOURCE GRADE TONNAGE .............................. 86

TABLE 14.12 UIZ INFERRED RESOURCE GRADE TONNAGE ............................... 86

TABLE 14.13 CIZ INDICATED RESOURCE GRADE TONNAGE .............................. 87

TABLE 14.14 CIZ INFERRED RESOURCE GRADE TONNAGE ............................... 87

TABLE 14.15 LIZ MEASURED RESOURCE GRADE TONNAGE ............................. 88

TABLE 14.16 LIZ INDICATED RESOURCE GRADE TONNAGE .............................. 88

TABLE 14.17 LIZ INFERRED RESOURCE GRADE TONNAGE ............................... 89

TABLE 14.18 PAK RESOURCE SUMMARY .............................................................. 90

TABLE 14.19 GLOBAL COMPARISON ...................................................................... 94

TABLE 14.20 COMPARISON OF PARAMETERS ...................................................... 97

TABLE 18.1 PHASE 1 BUDGET SUMMARY ......................................................... 101

TABLE 18.2 PHASE 2 BUDGET SUMMARY ......................................................... 101

F I G U R E S

FIGURE 4.1 LOCATION MAP ..................................................................................... 8

FIGURE 4.2 CLAIM MAP .......................................................................................... 11

FIGURE 5.1 PROPERTY ACCESS ........................................................................... 14

FIGURE 7.1 ARCHEAN SUB PROVINCES .............................................................. 19

FIGURE 7.2 REGIONAL GEOLOGY......................................................................... 20

FIGURE 7.3 PROPERTY GEOLOGY ....................................................................... 23

FIGURE 7.4 DETAILED PROPERTY GEOLOGY ..................................................... 24

FIGURE 7.5 UIZ ......................................................................................................... 26

FIGURE 7.6 CIZ ......................................................................................................... 27

FIGURE 7.7 LIZ ......................................................................................................... 28

FIGURE 8.1 TANCO PEGMATITE AND PAK PEGMATITE LOCATION ................. 30

FIGURE 8.2 DIVISION OF RARE METAL PEGMATITES ........................................ 31

FIGURE 8.3 DEPOSIT MODEL ................................................................................. 32

FIGURE 10.1 DIAMOND DRILL COLLAR LOCATIONS............................................. 38

FIGURE 11.1 2014 CESIUM BLANK CHART ............................................................. 54

FIGURE 11.2 2014 RUBIDIUM BLANK CHART ......................................................... 54

FIGURE 11.3 2014 TANTALUM BLANK CHART ....................................................... 55

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FIGURE 11.4 2014 LITHIUM BLANK CHART ............................................................ 55

FIGURE 11.5 2014 CESIUM DUPLICATE CHART .................................................... 56

FIGURE 11.6 2014 RUBIDIUM DUPLICATE CHART ................................................. 57

FIGURE 11.7 2014 TANTALUM DUPLICATE CHART ............................................... 57

FIGURE 11.8 2014 LITHIUM DUPLICATE CHART .................................................... 58

FIGURE 11.9 2015 CESIUM BLANK CHART ............................................................. 59

FIGURE 11.10 2015 RUBIDIUM BLANK CHART ......................................................... 60

FIGURE 11.11 2015 TANTALUM BLANK CHART ....................................................... 60

FIGURE 11.12 2015 LITHIUM BLANK CHART ............................................................ 61

FIGURE 13.1 THIN SECTION LOCATION ................................................................. 66

FIGURE 14.1 SPECIFIC GRAVITY STATION ............................................................ 69

FIGURE 14.2 PAK TOPOGRAPHIC IMAGE ............................................................... 70

FIGURE 14.3 UIZ WIREFRAME (LOOKING SOUTHEAST - NOT TO SCALE) ................................................................................................. 73

FIGURE 14.4 UIZ WIREFRAME (LOOKING NORTHWEST - NOT TO SCALE) ................................................................................................. 74

FIGURE 14.5 CIZ WIREFRAME (LOOKING SOUTHEAST - NOT TO SCALE) ................................................................................................. 75

FIGURE 14.6 CIZ WIREFRAME (LOOKING NORTHEAST - NOT TO SCALE) ................................................................................................. 76

FIGURE 14.7 LIZ WIREFRAME (LOOKING SOUTHWEST – NOT TO SCALE) ................................................................................................. 77

FIGURE 14.8 LIZ WIREFRAME (LOOKING NORTHEAST – NOT TO SCALE) ................................................................................................. 78

FIGURE 14.9 PAK VALIDATION SECTION 00SE ...................................................... 91

FIGURE 14.10 PAK VALIDATION SECTION 050 NW ................................................. 92

FIGURE 14.11 PAK VALIDATION SECTION 150 SE ................................................... 93

FIGURE 14.12 LI2O SWATH PLOT ............................................................................... 95

FIGURE 14.13 TA2O5 SWATH PLOT ............................................................................ 95

FIGURE 14.14 CS2O SWATH PLOT ............................................................................. 96

FIGURE 14.15 RB2O SWATH PLOT ............................................................................. 96

A P P E N D I X

APPENDIX A – CONTROL CHARTS

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A B B R E V I A T I O N S

UNITS OF MEASURE

above mean sea level ................................. amsl acre ................................................................. ac ampere ............................................................. A annum (year) .................................................... a billion ................................................................ B billion tonnes ................................................... Bt billion years ago ............................................. Ga British thermal unit .......................................BTU Centimetre ..................................................... cm cubic centimetre............................................ cm

3

cubic feet per minute .................................... cfm cubic feet per second ................................... ft

3/s

cubic foot ........................................................ ft3

cubic inch ......................................................... in cubic metre .................................................... m

3

cubic yard ...................................................... yd3

Coefficients of Variation ................................Cvs day .................................................................... d days per week ............................................. d/wk days per year (annum) .................................. d/a dead weight tonnes ....................................DWT decibel adjusted ............................................. Ba decibel ........................................................... dB degree ............................................................... ° degrees Celsius .............................................. °C diameter ............................................................ ø dollar (American) ......................................... US$ dollar (Canadian) ...................................... CDN$ dry metric ton ................................................ dmt foot .................................................................... ft gallon ............................................................. gal gallons per minute ....................................... gpm Gigajoule ........................................................ GJ Gigapascal .................................................. GPA Gigawatt ........................................................ GW Gram ................................................................. g grams per litre ................................................ g/L grams per tonne.............................................. g/t greater than ...................................................... > hectare (10,000 m

2) ........................................ ha

hertz ............................................................... Hz horsepower ..................................................... hp hour ................................................................... h hours per day ................................................. h/d hours per week ........................................... h/wk hours per year ................................................ h/a inch .................................................................. in

kilo (thousand)................................................... k kilogram ........................................................... kg kilograms per cubic metre ......................... kg/m

3

kilograms per hour .......................................kg/h kilograms per square metre ...................... kg/m

2

kilometre ......................................................... km kilometre ......................................................... km kilometres per hour .....................................km/h kilopascal ..................................................... kPa kiloton ............................................................... kt kilovolt ............................................................ kV kilovolt-ampere ............................................. kVa kilowatt .......................................................... kW kilowatt hour ................................................ kWh kilowatt hours per tonne ............................ kWh/t kilowatt hours per year ............................. kWh/a less than ........................................................... < litre ................................................................... L litres per minute............................................ L/m megabytes per second ................................Mb/s megapascal ................................................. Mpa megavolt-ampere ......................................... Mva megawatt ...................................................... MW metre ............................................................... m metres above sea level ............................... masl metres Baltic sea level ................................ mbsl metres per minute .....................................m/min metres per second ........................................ m/s microns .......................................................... µm milligram ........................................................ mg milligrams per litre ...................................... mg/L millilitre .......................................................... mL millimetre ...................................................... mm million .............................................................. M million bank cubic metres .......................... Mbm

3

million bank cubic metres per annum .... Mbm3/a

million tonnes ................................................. Mt minute (plane angle) .......................................... ' minute (time) ................................................. min month ............................................................ mo ounce .............................................................. oz pascal ............................................................. Pa centipoise ................................................. mPa∙s parts per million ........................................... ppm parts per billion ............................................. ppb percent ............................................................ % pound(s) ........................................................... lb

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pounds per square inch ................................. psi revolutions per minute ..................................rpm second (plane angle) ........................................ " second (time) .................................................... s short ton (2,000 lb) .......................................... st short tons per day ......................................... st/d short tons per year ........................................ st/y specific gravity ............................................... SG square centimetre ......................................... cm

2

square foot ...................................................... ft2

square inch ..................................................... in2

square kilometre .......................................... km2 square metre .................................................. m

2

three-dimensional........................................... 3D tonne (1,000 kg) (metric ton) ............................. t tonnes per day ............................................... t/d tonnes per hour .............................................. t/h tonnes per year .............................................. t/a tonnes seconds per hour metre cubed .... ts/hm

3

volt .................................................................... V week ............................................................... wk weight/weight ............................................... w/w wet metric ton ............................................... wmt

ACRONYMS

CIM .................................................................... Canadian Institute of Mining, Metallurgy and Petroleum CIZ ................................................................................................................... Central Intermediate Zone DSO ............................................................................................................................ Direct Shipping Ore DTM ......................................................................................................................... Digital Terrain Model GPS .............................................................................................................. Global Positioning Satellites GSC ............................................................................................................ Geological Survey of Canada HLM ......................................................................................................................... Houston Lake Mining ID

2 ..................................................................................................................... Inverse Distance Squared

ISO .................................................................................................. International Standards Organization LCT ................................................................................................................... Lithium Cesium Tantalum LIZ ......................................................................................................................Lower Intermediate Zone LRC ................................................................................................................... Lithium Rubidium Cesium MMI ................................................................................................................................. Mobile Metal Ion MNDM ................................................................................ Ministry of Northern Development and Mines NI ............................................................................................................................... National Instrument NN ............................................................................................................................... Nearest Neighbour NSR ........................................................................................................................... Net Smelter Royalty OGS .................................................................................................................Ontario Geological Survey P. Geo. ............................................................................................................... Professional Geoscientist PFS ........................................................................................................................... Pre-Feasibility Study the Property .................................................................................................... PAK Rare Metals Property QA / QC ............................................................................................ Quality Assurance / Quality Control QP ................................................................................................................................... Qualified Person REE .......................................................................................................................... Rare Earth Elements SG ..................................................................................................................................... Specific Gravity SQUI .................................................................................................... Spodumene + Quartz Intergrowth TDC ............................................................................................................................... Top Dead Centre UIZ .....................................................................................................................Upper Intermediate Zone VLF ........................................................................................................................... Very Low Frequency WSP .............................................................................................................................. WSP Canada Inc.

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1 SUMMARY The PAK Lithium Property (the Property) is located approximately 175 km north of Red Lake, in

northwestern Ontario.

Houston Lake Mining Inc. (TSX.V: HLM) owns the 100% rights to the Property claims. HLM’s land

holdings in the area comprise 417 contiguous unsurveyed claim units for a total of 6,672 hectares.

Two separate royalty agreements are in place for specific claim units and are subject to buyout

clauses.

There has been no commercial production and little exploration prior to HLM’s involvement on the

Property.

WSP Canada Inc. (WSP) was commissioned by HLM in August 2015 to complete an update to the

resource estimation on the Property based on additional diamond drilling and a bulk sample. WSP

prepared this report in accordance with National Instrument 43-101 (NI 43-101) Standards of

Disclosure for Mineral Projects.

1.1 GEOLOGY

The Property area is situated along the boundary between the Berens River and Sachigo

Subprovinces (Card and Ciesielski, 1986 and Card, 1990) of the Archean Superior Province of the

Canadian Shield.

The Property is underlain by the northwestern extension of the North Spirit Lake greenstone belt.

The greenstone belt within the Property boundary is bounded to the north by biotitic tonalities and

granites of the Whiteloon Lake Batholith (Sachigo Subprovince), and to the south by gneissic

granodiorites and granites of the Bear Head Lake Batholith (Berens River Subprovince).

The three main lithological domains on the Property are: metasedimentary units composed of pelitic

sediments, iron formation and conglomerate to the north; mafic metavolcanic and related

metasedimentary rocks to the south; and the Pakeagama Lake peraluminous granite and mica pluton

emplaced along the unconformable contact between metasedimentary and metavolcanics

metasedimentary rocks.

The Pakeagama Lake granitic pegmatite is a highly evolved, zoned, complex-type, petalite-subtype

Lithium Cesium Tantalum (LCT) pegmatite with highly anomalous values of lithium, cesium, tantalum,

and rubidium.

The Pakeagama Lake pegmatite is the second largest complex-type petalite subtype pegmatite dyke

in Ontario (Breaks et al, 1999).

Peter Vanstone, P. Geo., former chief geologist at the Tanco Mine, consolidated the pegmatite zones

using commonly accepted pegmatite nomenclature and Tanco zone mineralogical criteria. The three

main pegmatite zones identified in this work are (from northwest to southwest and perpendicular to

the strike of the pegmatite) the Central Intermediate Zone (CIZ – tantalum, rubidium, and cesium

enriched), Upper Intermediate Zone (UIZ - lithium and rubidium enriched), and the Lower

Intermediate Zone (LIZ – lithium and rubidium enriched). There is also a Wall Zone and Border Zone

but their extent is limited.

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The Property deposit model is a highly evolved, granitic, rare-element lithium cesium- tantalum

bearing (LCT), complex Type – Spodumene or Petalite Subtype pegmatite similar to the Tanco

pegmatite in the Bird River belt in southeastern Manitoba, which is the best known and a world-class

example of this type of deposit model.

1.2 CHANNEL SAMPLING AND DIAMOND DRILLING

A total of 29 channels totaling 218 metres were cut and samples collected between 2001 and 2015.

A total of 24 NQ diamond drillholes totaling 4,693 metres were completed between 2013 and in 2015.

A series of percussion holes were drilled for the bulk sample. Sample collection, sample preparation,

and sample analysis were completed to industry standards.

A Quality Assurance / Quality Control (QA/QC) program was in place for the diamond drilling

programs and the channel programs after 2011. The 2001 channel program did not include

standards and relied on the Analytical Laboratory’s internal QA/QC program.

1.3 RESOURCE ESTIMATION

The geological dataset generated by HLM, consisting of data derived from diamond drilling and

surface channel sampling, has been deemed suitable to support geological interpretation and

resource estimate.

The estimation of the three domains was completed using capped and composited sample data on a

2.5 m x 2.5 m x 2.5 m block. The estimation was completed using Inverse Distance Squared (ID2)

with Nearest Neighbour (NN) as a validation purposes.

The PAK mineral resource was developed on three domains at a Li2O equivalent cut-off grade of

0.4% and contains a Measured and Indicated Resource of approximately 7.9 Mt with an average

grade of 1.58% Li2O, 104 ppm Ta2O5, 0.04% Cs2O, and 0.31% Rb2O. There is an additional Inferred

Resource of approximately 0.3 Mt with an average grade of 1.20% Li2O, 103 ppm Ta2O5, 0.06%

Cs2O, and 0.36% Rb2O (Table 1.1). The effective date of the resource is March 4, 2016.

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Table 1.1 PAK Lake Resource Summary

Cut-off

Resource Category

Commodity Geologic Zone Tonnes (t)

Li2O (%)

Ta2O5 (ppm)

Cs2O (%)

Rb2O (%)

Contained Li2O (t)

Contained Ta2O5 (t)

Li2O EQ (%)

0.4

% L

i 2O

eq

Me

asu

red

Lithium Upper Intermediate Zone (UIZ) 333,500 3.94 58 0.03 0.12 13,136 19 4.02

Lithium Lower Intermediate Zone (LIZ) 683,100 1.87 90 0.03 0.29 12,797 62 2.00

Lithium Total Lithium Zone 1,016,600 2.55 80 0.03 0.23 25,933 81 2.67

Tantalum / Rubidium Central Intermediate Zone (CIZ) - - - - - - - -

Lithium / Tantalum / Rubidium Bulk Pegmatite 1,016,600 2.55 80 0.03 0.23 25,933 81 2.67

0.4

% L

i2O

eq

Ind

ica

ted


Lithium Lower Intermediate Zone (LIZ) 5,526,200 1.61 109 0.04 0.29 88,699 601 1.76


Tantalum / Rubidium Central Intermediate Zone (CIZ) 1,039,700 0.78 114 0.07 0.57 n/a 119 n/a


0.4

% L

i 2O

eq

Me

asu

red

+In

dic

ate

d


Lithium Lower Intermediate Zone (LIZ) 6,209,300 1.63 107 0.04 0.29 101,496 662 1.79


Tantalum / Rubidium Central Intermediate Zone (CIZ) 1,039,700 0.78 114 0.07 0.57 n/a 119 n/a


0.4

% L

i 2O

eq

Infe

rre

d

Lithium Upper Intermediate Zone (UIZ) 1,800 2.61 67 0.06 0.18 47 0 2.70

Lithium Lower Intermediate Zone (LIZ) 226,880 1.54 98 0.05 0.30 3,505 22 1.69

Lithium Total Lithium Zone 228,700 1.55 98 0.05 0.30 3,552 22 1.69

Tantalum /Rubidium Central Intermediate Zone (CIZ) 66,900 0.81 119 0.07 0.54 n/a 8 n/a

Lithium / Tantalum / Rubidium Bulk Pegmatite 295,600 1.20 103 0.06 0.36 3,552 30 1.35

4


1.4 RECOMMENDATIONS

It is WSP’s opinion that HLM is ready to commence a Pre-Feasibility Study (PFS) to assess the

viability of producing lithium, tantalum, and mica product concentrates. There is sufficient resource in

the measured and indicated categories to warrant the study. Two separate programs are proposed.

The successful completion of Phase 1 will have an impact on how Phase 2 is conducted.

1.4.1 PHASE 1

Phase 1 is to initiate a PFS to determine the economic viability of producing lithium, tantalum, and

muscovite product concentrates. Phase 1 will involve additional work designed to expand and infill

the current resource on the Property. This would include diamond drill testing below the current

resource on the north-west extent with a target of additional tonnage that would be amenable to open

pit mining methods. Other work in Phase 1 includes the continuation of baseline environmental work,

the completion of metallurgical testing, and a geotechnical review of the core for support of the PFS

based on producing lithium, tantalum, and muscovite mica product concentrates.

A budget of $850,000 is estimated to be required to complete the Phase 1 program, which would

include the PFS, diamond drilling, and continued environmental monitoring.

1.4.2 PHASE 2

Phase 2 is designed to further delineate and test the resource based on results and

recommendations from the PFS. Work should include step-out diamond drilling of the deposit and a

larger advanced exploration bulk sample of the UIZ for industrial testing purposes of the UIZ as a

direct shipping ore (DSO) for the ceramic-thermal glass and the frits and glaze industries.

The budget for Phase 2 is estimated to be $1,500,000, which includes portion of the advanced

exploration sample plus additional diamond drilling, and ongoing metallurgical and environmental

work.

5


2 INTRODUCTION The Property is a lithium-tantalum-bearing pegmatite system located approximately 175 km north of

Red Lake, in northwestern Ontario. The claims are currently owned 100% by HLM.

No exploration work had been conducted on the Property prior to HLM’s acquisition of the Property in

1999. All previous work in the region was government-funded mapping projects.

To date, HLM has delineated three mineralized domains within the PAK pegmatite on the Property

through the compilation of mapping, channel sampling, and diamond drill data.

The objectives of this report are to:

Prepare a technical report on the PAK Property in accordance with NI 43-101 summarizing land tenures, exploration history, and drilling;

Update the mineral resource;

Provide recommendations and budget for additional work.

This report has been prepared in accordance with NI 43-101, Form 43-101F1 and Companion Policy

43-101CP.

All work is completed using the metric system and all values are in Canadian dollars unless otherwise

stated.

All data reviewed for the report was provided by HLM in digital format, with access to paper reports

and logs when requested. The work completed by HLM encompasses surface exploration, including

mapping, sampling, trenching, and geological/structural modeling. HLM has completed four rounds of

diamond drilling on the Property.

Historical work conducted in the region has been compiled by HLM and was available for review.

The author of this report and qualified person (QP), Mr. Todd McCracken, P.Geo. is a professional

geologist with 24 years of experience in exploration and operations, including several years working

in intrusive hosted deposits. Mr. McCracken visited the Property between October 1 and 2, 2013 and

again between July 14 and 15, 2015. Mr. McCracken visited the core farm located at 2736 Belisle

Drive in Val Caron, Ontario on June 7, 2014 and again on June 20, 2015 to review the core with

Mr. Garth Drever, P. Geo., Vice President Exploration for HLM, and Mr. Peter Vanstone, P. Geo. and

independent QP to HLM.

WSP considers the site visit current, per NI 43-101CP, Section 6.2, on the basis that the work

completed on the Property has been reviewed by the QP and all practices and procedures

documented were reviewed.

6


3 RELIANCE ON OTHER EXPERTS WSP has reviewed and analyzed data and reports provided by HLM, together with publicly available

data, drawing its own conclusions augmented by direct field examination.

This report includes technical information, which required subsequent calculations to derive subtotals,

totals, and weighted averages. Such calculations inherently involve a degree of rounding and

consequently introduce a margin of error. Where these occur, the QP does not consider them to be

material.

The QP who prepared this report relied on information provided by experts who are not QPs. The QP

believes that it is reasonable to rely on these experts, based on the assumption that the experts have

the necessary education, professional designations, and relevant experience on matters relevant to

the technical report.

Todd McCracken, P.Geo., relied upon Trevor Walker, President of HLM for information pertaining to mineral claims as disclosed in Section 4.0. The information pertaining to mineral claims was confirmed by the Ontario Ministry of Northern Development and Mines CLAIMaps website (www.mndm.gov.on.ca).

7


4 PROPERTY DESCRIPTION AND LOCATION 4.1 LOCATION

The Property is located 175 km north of Red Lake, Ontario in the Red Lake Mining Division and is

on Crown Land (Figure 4.1). The centre of the Project is located on National Topographic System

map sheet reference is 53C/11 at approximately 52°36’N latitude and 93°23’W longitude near

Pakeagama Lake.

4.1 MINERAL DISPOSITION

The Property is composed of 33 claims (436 contiguous un-surveyed claim units) for a total of

6,976 hectares (17,238 acres) as can be seen in Table 4.1 and on Figure 4.2. All mining claims are

currently in good standing.

The Property is presently owned 100% by HLM. In late March of 1999, HLM entered into an option

agreement to earn a 100% interest from John Gregory Brady. Upon complying with the terms of the

agreement, HLM exercised their option and acquired a 100% interest in the claim.

On December 8, 2010, HLM entered into a 6-year agreement with two private individuals,

Michael Desmeules (50%) and Karin Smith (50%) to acquire 100% of three mining claims (each

16 unit claims) collectively called the Pakeagama South-East. In 2015, HLM completed the earn-in

by issuing a total of 500,000 common shares and payment of $110,000.

Fourteen additional claims were staked in 2014 to the northwest and southeast, and in 2015 two

more claims were staked to the west to make up the current land tenure.

4.2 TENURE RIGHTS

Surface rights to Property currently remain with the Crown. The Ontario Mining Act (2010) grants

access to a mineral claim without having the surface rights.

8


Figure 4.1 Location Map

9


4.3 ROYALTIES AND RELATED INFORMATION

The terms of the royalty require payment of a 2.5% NSR for the original claim 1232441. HLM has a

provision to reduce the royalty to 1.5% at a cost of $1,000,000. A similar royalty agreement is in

place for claims 4224922, 4224923, and 4224924 with a 2.5% NSR and the ability to reduce the

royalty to 1.0% for $1,500,000.

Table 4.1 Summary of Mineral Disposition

Property Name Mining Claim (KRL)

Units Date Recorded

Next Due Date

Recorded Owner

Area (Ha)

Pakeagama Lake 1232441 16 1998/07/30 2018/07/30 HLM (100%) 256

sub-total 16 256

PAK Southeast 4224922 16 2009/08/12 2016/08/12 HLM (100%) 256

4224923 16 2009/08/12 2016/08/12 HLM (100%) 256

4224924 16 2009/08/12 2016/08/12 HLM (100%) 256

sub-total 48 768

PAK Northeast 4274173 12 2013/03/19 2017/03/19 HLM (100%) 192

4274663 16 2013/03/19 2017/03/19 HLM (100%) 256

sub-total 28 448

PAK Northwest 4272452 16 2012/09/25 2016/09/25 HLM (100%) 256

4272453 16 2012/09/25 2016/09/25 HLM (100%) 256

4272454 16 2012/09/25 2016/09/25 HLM (100%) 256

4274766 15 2014/07/10 2016/07/10 HLM (100%) 240

4274767 15 2014/07/10 2016/07/10 HLM (100%) 240

4274768 12 2014/07/10 2016/07/10 HLM (100%) 192

4274769 15 2014/07/10 2016/07/10 HLM (100%) 240

4274776 15 2014/07/10 2016/07/10 HLM (100%) 240

4274777 15 2014/07/10 2016/07/10 HLM (100%) 240

4274778 15 2014/07/10 2016/07/10 HLM (100%) 240

4274779 15 2014/07/10 2016/07/10 HLM (100%) 240

sub-total 165 2,640

PAK River Extension 4244431 15 2014/03/11 2017/03/11 HLM (100%) 240

4244432 15 2014/03/11 2017/03/11 HLM (100%) 240

4244433 15 2014/03/11 2017/03/11 HLM (100%) 240

4244434 15 2014/03/11 2017/03/11 HLM (100%) 240

4244435 15 2014/03/11 2017/03/11 HLM (100%) 240

4274680 12 2013/03/19 2017/03/19 HLM (100%) 192

4274685 12 2013/02/21 2017/02/21 HLM (100%) 192

4274686 12 2013/03/19 20176/03/19 HLM (100%) 192

4274687 12 2013/03/19 2017/03/19 HLM (100%) 192

sub-total 123 1,968

10


Property Name Mining Claim (KRL)

Units Date Recorded

Next Due Date

Recorded Owner

Area (Ha)

PAK South-Southwest 4245780 1 2014/03/11 2017/03/11 HLM (100%) 16

4274681 4 2013/02/21 2017/02/21 HLM (100%) 64

4274682 12 2013/02/21 2017/02/21 HLM (100%) 192

4274683 8 2013/02/21 2017/02/21 HLM (100%) 128

4274684 12 2013/02/21 2017/02/21 HLM (100%) 192

4283825 16 2015/06/10 2017/06/10 HLM (100%) 256

4283826 3 2015/06/10 2017/06/10 HLM (100%) 48

sub-total 56 896

Grand Total 436 6,976

11


Figure 4.2 Claim Map

12


4.4 ENVIRONMENTAL LIABILITIES

No industrial activities such as mineral processing have been conducted on the Property.

Disturbance on the Property has been limited to drill trails, drill pad set ups and a bulk sample.

WSP did not observe or is not aware of any environmental liabilities on the Property.

4.5 PERMITS

All permits required to conduct exploration on the Property are current.

4.6 OTHER RELEVANT FACTORS

The PAK Lithium Project is not currently subject to any formal First Nation agreements. The

development of the Project will incorporate hiring practices for the employment of North Spirit Lake

and Deer Lake people and services.

The Pakeagama Lake pegmatite is currently delineated on the Pakeagama Lake Property which lies

directly within the trapline area designated as RL 122. The trapping area is currently held by a

resident of Deer Lake. The PAK River Extension Property to the southeast is within the trapline

designated as RL 121, which is currently held by a resident of North Spirit Lake.

In 2013 Phase II of the Ontario Mining Act modernization was implemented whereby Aboriginal

notification and consultation is mandated prior to exploration plans and permits for mineral exploration

is granted by the government.

HLM submitted for an exploration permit for the Project by which the Ministry of Northern

Development and Mines (MNDM) have identified the Aboriginal communities of Deer Lake First

Nation and North Spirit Lake First Nation to be notified about HLM’s planned activities. A copy of the

exploration permit proposal was sent to the above-noted Aboriginal communities on December 2,

2013, advising them that their comments, with respect to potential adverse effects of the proposed

activities on their Aboriginal and treaty rights be provided.

During the 2014 drilling program, representatives from the North Spirit Lake band council visited the

Property, updated on the progress to date and were provided with a tour of the pegmatite area and

the operating diamond drill.

On July 14, 2015, representatives from North Spirit Lake visited the Property and were provided a

tour of the drill camp and outcrop area including the site where the bulk sample was extracted.

In December 2015, both Deer Lake and North Spirit Lake Councils were provided with a draft

proposal for an exploration agreement with HLM.

13


5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

5.1 ACCESS

Access to the Property is available year-round by chartered ski or float equipped aircraft from Red

Lake, Ontario (175 km) to the south of Pakeagama Lake.

The project is located in a relatively isolated area of northwestern Ontario where infrastructure is

absent except for a winter road, which services the communities of Deer Lake, Sandy Lake, and

North Spirit Lake. The winter road is located adjacent to the west side of the claim group (Figure 5.1)

and vehicle access can be gained to the Property from this winter road in February and March.

Bearskin Airlines and Wasaya Air service the nearby communities of Deer Lake, North Spirit Lake,

and Sandy Lake with daily flights year-round.

Access to the Property is available year-round if required.

14


Figure 5.1 Property Access

15


5.2 CLIMATE

Four climate data stations operated by Environment Canada are located at Island Lake in Manitoba,

and Red Lake, Pickle Lake and Big Trout Lake in Ontario. The average mean annual temperature is

-0.9°C. The average daily temperature in summer is from 8.9°C to 19.2°C while in winter the average

range is from - 20.3°C to -11.6°C. Average yearly precipitation for the area is 655 mm

(www.climate.weather.gc.ca).

5.3 INFRASTRUCTURE

Water sufficient for mining operations is present within the Property. Surface rights sufficient for a

mining operation can be readily obtained, and the necessary area for mining and processing

infrastructure exists.

Currently no electric power is available on the Property, nor does a power line come within close

proximity of the Property.

There is no immediate skilled labour force close to the Property. The location of the Property within

northwestern Ontario and proximity to the Red Lake mining camp and Manitoba ensures that skilled

mining personnel can be found.

5.4 SITE TOPOGRAPHY, ELEVATION, AND VEGETATION

The Property is located in an area of variable topographic relief, with a series of ridges with the

extensive development of cliff faces parallel the general regional strike of the geology surrounded by

low lying areas covered by swamps, lakes, and rivers. The mean elevation on the Property is

approximately 320 masl.

The Property lies at the northern boundary of the Lac Seul Upland eco-region and the southern

boundary of the Hayes River Upland eco-region of the Boreal Shield. The region is classified as

having a sub-humid mid-boreal eco-climate (Ecological Stratification Working Group, 1998).

The dominant vegetation is coniferous forest. Higher elevations are covered by stands of jack pine

up to 6 m high while swampy areas are dominated by black spruce. Upland areas are covered with

discontinuous deposits of acidic sandy tills while thin lacustrine clay deposits tend to cap the tills in

low-lying areas. The resulting deadfall from a 1995 forest fire inhibits easy foot travel. Another forest

fire burned a portion of the Pakeagama Lake project area in 2008, including the area around the

pegmatite.

16


6 HISTORY A. P. Low of the Geological Survey of Canada (GSC) completed the first geological reconnaissance

mapping of the region in 1886. Additional geological surveys were carried out by G. V. Douglas

(1925) and M. E. Hurst (1928) of the Ontario Department of Mines.

Most of the exploration activity in the region has been centred on the Favourable and Setting Net

Lakes area located 25 to 40 km to the northwest of the Property. While prospecting, K. C. Murray

identified gold in the Favourable Lake area in 1927. The gold property was developed as the Berens

River Mine and produced 4,451 kg Au, 160,926 kg Ag, 2,770 t Pb, and 815,147 kg Zn from

508,665 tons of ore between 1939 and 1948 (Stone, 1998). Subsequent exploration by Golsil Mines

Limited, Zahavy Mines Limited, Getty Mines Limited, and Noramco Mines Ltd. was carried out until

the early 1990s.

Geological mapping of portions of the region was carried out by Ayres (1970, 1972a). He noted

spodumene in a pegmatite dyke and holmquistite within granitic rocks near Setting Net Lake (25 km

WNW of Pakeagama Lake). A grab sample from the pegmatite dyke contained 0.52% Li (Ayres,

1972b).

An airborne reconnaissance gamma-ray spectrometer survey was flown over the Pakeagama Lake

area in 1977 as part of a regional coverage program by the Ontario Geological Survey (OGS) and the

GSC in 1979. The survey was flown at a 120 m terrain clearance with 5 km line spacing and a

2.2 km station interval. No significant radiometric anomalies were detected in the immediate vicinity

of Pakeagama Lake.

6.1 ONTARIO GEOLOGICAL SURVEY PROGRAMS

Geological mapping of the region was completed by D. Stone of the OGS in 1990 (Stone et al., 1993;

Stone, 1998). Tourmaline-rich samples from the vicinity of Pakeagama Lake returned anomalous

levels of Li, Cs, Ta, and Be during this work. Five rare metal mineral occurrences were detected over

a 35 km trend along the Bear Head Lake Fault Zone, however, the Pakeagama Lake pegmatite

occurrence became the main focus of detailed work.

In 1998 and 1999, Dr. F. Breaks and Dr. A. Tindle of the OGS, studied the Pakeagama pegmatite.

Approximately 2,186 analyses had been conducted to establish that the Pakeagama rare metals

pegmatite is potentially a world-class pegmatite suggesting the presence of a Tanco type mineralizing

system. At the time, the Pakeagama pegmatite was thought to vary in width from 30 to 125 m with a

strike length of at least 260 m (open in both directions) that may extend another 300 m to an aplite

dyke showing on the shores of Pakeagama Lake. “The detailed documentation of a variety of

tantalum-rich minerals coupled with the presence of pollucite (main cesium ore mineral) renders the

Pakeagama Lake pegmatite and adjoining area one of the best exploration targets for tantalum and

cesium in Northwestern Ontario” (Breaks, 1999).

6.2 HISTORIC EXPLORATION

There has been little exploration by publicly traded or private companies prior to HLM’s involvement.

Table 6.1 summarizes the work that has been completed on the Property. The information has been

gathered from various assessment reports.

17


Table 6.1 Property Summary

Year Company Activity Highlights

1886 GCS First recorded Work First Reconnaissance work.

1926 ODM Reconnaissance Survey Reconnaissance scale mapping.

1929 ODM Geological Mapping Reconnaissance scale mapping; gold identified in Favourable Lake area.

1937 ODM Geological Mapping Gold property developed as Berens River Mine.

1970-1972 ODM Geological Mapping Identified spodumene near Net-Setting Lake.

1977 OGS‐GSC Airborne Radiometrics Regional survey; 5 km line spacing at 2.2 km stations. No significant anomalies identified in the Pakeagama Lake area.

1977‐1988 OGS Geological Mapping Systematic mapping of the region.

1990-1993 OGS Geological Mapping Identified anomalous Li, Cs, Ta, and Be in tourmaline-rich samples at Pakeagama Lake and discovered 5 rare metal occurrences over 35 km along the Bear Head Fault Zone.

1998-1999 OGS Geological Mapping - Channel Sampling

Completed detailed mapping and geochemistry (grab and channel samples) to establish Pakeagama Lake Pegmatite as world-class with Tanco-type mineralization. Significant mineralized zones were identified (285 ppm Ta2O5, 0.59% Rb2O, 967 ppm Cs2O, and 1.15% Li2O over 11.0 m).

1999 HLM Geological Mapping and Sampling

Confirmed work completed by the OGS.

2001 HLM Ground Geophysics 26-km magnetic and VLF survey; the survey was unsuccessful in delineating the pegmatite zone, however, defined the contacts between metasedimentary and granitic rock that contains the pegmatites in overburden covered areas.

2001 EFR Geological Mapping and Sampling

Mapped and sampled the area immediately to the northwest of the pegmatite. No anomalies noted.

2001 HLM Geological Sampling (Channel Sampling)

Identified and confirmed high-grade lithium in the "Core Zone" of 4.5% Li2O over 13.9 m.

2008 HLM Line Cutting - Soil Sampling

Re-established the grid for mapping the pegmatite and surrounding area. An Enzyme Leach survey was completed showing an apparent continuity of the anomalous zones away from the pegmatite to the southeast and east. This is most apparent with Cs, V, Ta, Li, Ga, and Nb.

2010 HLM Acquisition of Claims by option agreement

Three claims secured the land holdings immediately to the south and east of the pegmatite covering most of Pakeagama Lake.

18


Year Company Activity Highlights

2011 HLM MMI soil sample survey The regional survey was somewhat successful in delineating elevated cesium, lithium, and rubidium MMI concentrations both to the northwest and southeast directions coincident with the assumed orientation of the Pakeagama Lake pegmatite.

2012 HLM Channel Sampling; Staking

Historical and 2 new channels were sampled across portions of the pegmatite verifying historical grades by using certified standards. Increased land tenure to the southeast along the pluton.

2013 HLM Phase I Diamond Drilling; Staking

Completed the first diamond drilling on the Property totaling 955 m in 6 holes. Intersected 154 m wide pegmatite zone grading 1.22% Li20, 111 ppm Ta2O5, and 0.41% Rb2O and a high-grade Lithium zone of 18 m grading 4.22% Li2O. Continued staking along the pluton.

2013 HLM Spodumene Study Completed an electron microprobe study confirming low-inherent iron content of the spodumene at the Pakeagama Lake Pegmatite.

2014 HLM Phase II Diamond Drilling; Staking

Completed 1,489 m in 9 holes which confirmed continuity of the high-grade UIZ and extended the strike length and depth extent of the mineralized pegmatite zones. Continued staking to the southeast.

2014 HLM Channel Sampling; Staking

Completed the twinning of outstanding historical channels and cut two new channels confirming the grades and width of the UIZ at surface. Staked to the northwest.

2015 HLM Phase III Diamond Drilling Completed 1,641m in 8 holes which confirmed continuity of the grades and extended the strike length and depth extent of the mineralized pegmatite zones.

2015 HLM Bulk Sample of UIZ In late February and early March a drill-blast program of 67 holes was completed with an approximately 300-tonne sample extracted and hauled to Red Lake for crushing and transported to SGS in Lakefield, ON for final processing as a direct shipping ore product (DSO) for an industrial test in Europe.

2015 HLM Initiated Baseline Sampling, Staking

Established water sampling and monitoring stations within the PAK project area to be sampled three times annually (Spring freshet, late Summer, and Winter). Also initiated flora and fauna study including species lists. Staked two additional claims along the access trail to the winter road.

2015 HLM Phase IV Diamond Drilling Completed 608 m in 2 holes which tested the eastern extension of the pegmatite. As predicted, the pegmatite body is continuous and plunging to the east at roughly 45 degrees.

2015 HLM Channel Sampling Stripped overburden and extended surface exposures of the high-grade UIZ to the WNW and completed 70 m of new channel cuts in 8 separate channels.

EFR - Emerald Fields Resources GSC - Geological Survey of Canada HLM - Houston Lake Mining ODM - Ontario Department of Mines OGS - Ontario Geological Survey

19


7 GEOLOGICAL SETTING AND MINERALIZATION

7.1 REGIONAL GEOLOGY

The Project area is situated along the boundary between the Berens River and Sachigo Subprovinces

(Card and Ciesielski, 1986 and Card, 1990) of the Archean Superior Province of the Canadian Shield

(Figure 7.1). These subprovinces comprise a series of relatively isolated volcano-sedimentary

(greenstone) belts surrounded by extensive granitic and gneissic suites of rock. The subprovinces

are separated by the Bear Head Lake Fault Zone (Figure 7.2).

Figure 7.1 Archean Sub Provinces

20


Figure 7.2 Regional Geology

21


Two of the greenstone belts that are located along the Bear Head Lake Fault Zone are the

Favourable-Setting Net Lakes and the North Spirit Lake greenstone belts located to the northwest

and southeast of the Property, respectively. The belts are connected through the Pakeagama Lake

area by the Bear Head Lake Fault system. The main assemblages of volcanic and sedimentary rocks

that are identified in each belt are, in part, correlated between the two belts (Stone et al, 1993). The

assemblages of the Favourable Lake and North Spirit Lake greenstone belts have been

metamorphosed under greenschist facies conditions, however an increase to amphibolite facies

occurs in proximity to the Bear Head Lake Fault Zone. Amphibolite facies is the predominant

metamorphic grade in the Project area outside of the greenstone belts.

The Bear Head Lake Fault is the dominant structural feature in the region and has been traced for

over 140 km from NW-SE. The fault is composed of a several hundred metres thick zone of mylonite.

The presence of cataclastites, tension gashes infilled by vuggy quartz-epidote-adularia, and potassic

alteration indicate that brittle deformation has been superimposed on the mylonites. A dextral

transcurrent dislocation of the Bear Head Lake Fault has been interpreted from microstructures

(Germundson, 2008). The regional gneissosity trends NW-SE and generally are steeply dipping

inward towards the core of the volcano-sedimentary assemblage in the vicinity of Pakeagama Lake.

The Bear Head Lake Fault Zone appears to be the locus for a peraluminous suite of granitic plutons.

Five major plutons consisting of two-mica granites (fertile granites) are documented over the 140 km

strike length of the fault. Fertile granites are interpreted to be the parental rocks that give rise to rare

metal pegmatites.

7.2 PROJECT GEOLOGY

The Property is underlain by the northwestern extension of the North Spirit Lake greenstone belt.

The greenstone rocks are approximately 2 km wide in the vicinity of the Property (Figure 7.3).

The greenstone belt within the Property boundary is bounded to the north by biotitic tonalities and

granites of the Whiteloon Lake Batholith (Sachigo Subprovince) and to the south by gneissic

granodiorites and granites of the Bear Head Lake Batholith (Berens River Subprovince of the

Superior Province).

There are three main lithological domains. To the northeast, rocks with metasedimentary origins are

composed of pelitic sediments, iron formation and conglomerate. The southwest region is comprised

dominantly of mafic metavolcanic and related metasedimentary rocks. The elongate, 2.5 by 15 km,

Pakeagama Lake peraluminous granite and mica pluton trending northwest-southeast was emplaced

along the unconformable contact between metasedimentary and metavolcanic-metasedimentary rocks.

The Pakeagama Lake granitic pegmatite is a highly evolved, zoned, complex-type, petalite-subtype LCT

pegmatite with highly anomalous values of lithium, cesium, tantalum and rubidium (Breaks et al., 1999).

The pegmatite body outcrops near the northwestern margins of the Pakeagama Lake pluton

(Figure 7.3). On surface, a metasedimentary sequence with banded iron formation forms an apparent

northern boundary to the pegmatite. Muscovite and tourmaline-bearing pegmatites and aplites occur up

to 1 km from the main pegmatite mass (Breaks et al, 1999). The Pakeagama Lake pegmatite is the

second largest complex-type petalite subtype pegmatite in Ontario (Breaks et al, 1999).

The relatively fresh-appearing pegmatite has irregular, steeply dipping contacts with the weakly

foliated garnet-muscovite-biotite granite host rock. A 130°strike is inferred from the coincidence of

the exposed 260 m strike length, the weak foliation in the host granite and the general trend of the

Bear Head Lake Fault. The pegmatite is open along strike in both directions.

22


The exposed outcrop area was mapped initially by Dr. F. Breaks in 1999 and at least 5 separate

zoned phases were identified (Breaks et al 1999). More recently P. Vanstone, former chief geologist

at Tanco, was contracted by HLM and consolidated the pegmatite zones using commonly accepted

pegmatite nomenclature and Tanco zone mineralogical criteria. (Figure 7.4). The three main

pegmatite zones identified in this work are (from northwest to southwest and perpendicular to the

strike of the pegmatite) the Central Intermediate Zone (CIZ – tantalum, rubidium, and cesium

enriched), Upper Intermediate Zone (UIZ - lithium and rubidium enriched), and the Lower

Intermediate Zone (LIZ – lithium and rubidium enriched). A lower and upper wall zone has also been

described but not included as a separate mapped unit.

23


Figure 7.3 Property Geology

24


Figure 7.4 Detailed Property Geology

25


7.3 MINERALIZATION

7.3.1 UPPER INTERMEDIATE ZONE (UIZ)

The Upper Intermediate Zone (“UIZ”) represents the lithium zone within the pegmatite and is

dominated by “SQUI” (Spodumene + Quartz Intergrowth), a term used to describe an isochemical

reversion resulting in the replacement of primary petalite by oriented spodumene + quartz intergrowth

(London, 1984), with lesser grey K-feldspar and primary white spodumene in quartz (Figure 7.5).

Phosphate minerals such as montebrasite (Breaks et al., 1999) and apatite, and lithian mica are

common accessory minerals.

7.3.2 CENTRAL INTERMEDIATE ZONE (CIZ)

The Central Intermediate Zone (“CIZ”) is located in structurally higher portions of the pegmatite and

represents the tantalum and rubidium zone of the pegmatite. The CIZ is in contact with both the

Upper Intermediate Zone (UIZ) and Upper Wall Zone, and persists to the southeast edge of the

outcrop where it is believed the pegmatite continues under the till cover. To the southeast, the CIZ is

intersected by channels CH-1 and CH-7 where it consists of similarly sized fragments of randomly

oriented coarse K-feldspar + mica + quartz. Micas appear to alter primary K-feldspar. Blue apatite

prisms up to 1 cm wide and several cm’s long accompany the mica-rich zones. In the adjoining area

to the northeast of CH-7, the K-feldspars are more or less completely replaced with lithian mica +

quartz. In this area veinlets and patches of lepidolite are common. Channel 1 (CH-1) contains the

highest tantalum grades found to date in the exposed pegmatite, which persist in the subsurface in

drill holes PL13-001 and -006, in addition to high rubidium and elevated cesium grades. To the

northwest, channels CH-8 and CH19 intersect the central portion of the exposed CIZ where it

consists of predominantly grey K-feldspar with minor lithian mica + quartz alteration. Drill holes PL13-

004 and -003 confirm the extension of the CIZ into the subsurface in this area, where it features

notable cm-scale blebs of the rare cesium mineral pollucite, and high Ta and Rb grades. Figure 7.6

shows an outcrop and photomicrograph of the CIZ.

7.3.3 LOWER INTERMEDIATE ZONE (LIZ)

The Lower Intermediate Zone (LIZ) comprises the bulk of the exposed pegmatite and is considered

an intermediate stage zone with significant lithium, tantalum and rubidium. The zone comprises

predominantly K-feldspar, Na-feldspar, SQUI and lithian muscovite (Figure 7.7). Pollucite also occurs

in an intersection of LIZ in drill hole PL13-005. The zone has undergone both ductile and brittle

deformation at the apparently structurally lowest portions of the pegmatite. Ductile deformation is

manifested as a banded appearance on surface, where seams of oriented mica provide a planar

fabric.

26


Figure 7.5 UIZ

27


Figure 7.6 CIZ

28


Figure 7.7 LIZ

29


7.3.4 WALL ZONES

The Wall Zones (upper and lower) of complex LCT type pegmatites are generally characterized by

the occurrence of brick-red K-feldspar (perthite) and simple mineralogy (Černý, 2005, Černý and

Vanstone 1996). The zone mineralogy is simple, but the brick-red colouration of the K-feldspar is

more common in the portion of the pegmatite in close proximity to the metasediments. The same

colouration does generally not occur where the pegmatite is in contact with the granite. In this latter

case, the sections of Wall Zone display a light to medium grey K-feldspar. It is assumed lower

inherent iron levels of the Pakeagama Lake granite, unlike the metasediments, were not sufficient to

generate the K-feldspar colour change in the adjoining pegmatite.

The Upper Wall Zone found in the southwest portion of the pegmatite exposure, is in contact with the

lithium rich UIZ and is composed of quartz with lesser pale-red coloured K-feldspar, minor

phosphates and accessory beryl and lithian mica. The exposure of this zone is limited.

The Lower Wall Zone is mineralogically similar to the Upper Wall Zone. A common feature of the

footwall Wall Zone in the more complex LCT-type pegmatites is the presence of bands of sodic aplite

(“footwall aplite”). These sodic bands are generally not common in the Upper Wall Zone. The

Pakeagama Lake pegmatite is somewhat more complex as bands of what appears to be pre-existing

banded sodic aplites are found throughout the pegmatite. The contact with the LIZ is gradational and

is defined by the general absence of SQUI within the wall zones and the change in colour of the

K-feldspars from pale-red to the light grey commonly found throughout the pegmatite. Like the LIZ,

this zone has undergone deformation.

30


8 DEPOSIT TYPES HLM’s target or deposit model is the highly evolved, granitic, rare-element lithium-cesium-tantalum

bearing (LCT) complex type, petalite subtype pegmatite. The Tanco pegmatite situated in the Bird

River belt in southeastern Manitoba, is the best known and a world-class example of this type of

deposit model. Figure 8.1 shows the location of the Tanco pegmatite relative to the geological

subprovinces of the western Superior Craton and Pakeagama Lake.

Figure 8.1 Tanco Pegmatite and PAK Pegmatite Location

31


Granitic pegmatites are relatively common and widespread, and have been divided into five classes

based on the pressure-temperature conditions that characterize their host rock suites (Černý and

Ercit, 2005). Criteria, including mineral assemblages, geochemical signature and conditions of

consolidation or combinations thereof, are used to further divide the classes into sub-classes, types,

and subtypes (Figure 8.2).

Figure 8.2 Division of Rare Metal Pegmatites

Of the five classes, the rare-element class is the group with the most attractive economic potential

and can represent economic sources of tantalum, ceramic grade spodumene, rubidium, and the main

cesium ore mineral, pollucite. The lithium rich, rare-element pegmatites are not common and

comprise

32


Figure 8.3 Deposit Model

The internal structure of pegmatites varies from simple or un-zoned to complexly zoned. Zonation, or

the lack thereof, provides the starting point for the pegmatite internal anatomy which is largely what

distinguishes pegmatites from other ordinary plutonic igneous rocks and is manifested by variations in

the spatial distribution of grain size, mineral assemblage, crystal habit, and / or rock fabric.

Pegmatites crystalizing from very highly fractionated melts have the most evolved internal structure.

These highly fractionated pegmatitic melts are enriched in fluxes such as H, B, P and F, in addition to

water, lithium, rubidium, cesium, tantalum, and beryllium which make the melts less viscous than a

granitic melt and thus able to migrate farther from the source pluton (London, 2008, p. 259).

The complex-type, petalite and spodumene subtype pegmatites are the products of the most highly

fractionated melts and as such, are the most complexly zoned with up to eleven different zones

characterized by variable textures and mineral modes (Černý, 1991; Černý, 2005). As an example,

the Tanco pegmatite has nine zones and its most notable geochemical anomalies being its high

tantalum content along with high cesium and phosphorus contents, the latter two being the hallmark

of a pelitic metasedimentary source (London, 2008 p. 109).

33


The economic concentrations of the lithophile rare-elements will occur in pegmatites crystalizing from

the most highly evolved melts. Some of the lithophile rare-elements may occur in separate zones,

which may allow for selective exploitation. Economic tantalum mineralization can be complex and the

host mineralogy for rubidium can be different in different zones, but pollucite is the main cesium

mineral and according to Kesler et al (2012) spodumene is the most economically important lithium

mineral.

Figure 8.3 shows the internal zonation of a pegmatite from the outer border zone to the central core

zone. The intermediate zones at the Pakeagama pegmatite appears to be similar to Tanco with

respect to mineralogy and concentrations of Li, Ta, Cs, and Rb (Vanstone, 2013).

34


9 EXPLORATION Eight new channels (Channel 22 to 29) totaling 69.8 m were completed in the summer of 2015.

(Figure 9.1). A total of 73 samples were collected.

Sampling was completed by HLM personnel along with personnel from Haveman Brothers of

Kakabeka Falls, Ontario.

The channels were oriented perpendicular to the strike of the pegmatite’s internal mineralogical zones

and were cut continuously across the zones. The length of a channel was determined by the width of

the pegmatite zone being sampled. The original cuts completed in 2001 consisted of a series of

offset channels to achieve a full section across a zone.

The channels were wet-cut approximately 3.5 to 4 cm wide and 9 to 10 cm deep with a motorized

circular diamond saw. Sample lengths were typically one metre or less, depending on zone

mineralogy and boundaries. After cutting, the channels were washed to mitigate cross-contamination

by the cuttings. The samples were then removed using a hammer and chisel. The samples were laid

out in order next to the channel and were geologically described, washed, assigned a sample

number, and then bagged. The sample number was also etched on a metal tag that was secured to

the outcrop at the beginning of each sample cut. The start of each channel was assigned a GPS

coordinate and the cut channel assigned a bearing.

Each sample bag was sealed using a plastic zip tie. The poly bags were then placed into rice bags,

which were then labeled and closed off with zip ties. HLM personnel transported the bags of samples

to Val Caron where sample blanks and standards were inserted into the sample stream. All samples

were then shipped to Actlabs or AGAT laboratories in Sudbury, Ontario.

Table 9.1 summarizes the location of the 2015 channels, and Table 9.2 summarizes the results for

the 2015 channel program.

Table 9.1 2015 Channel Location Summary

Channel No. Easting Northing Elevation (masl) Azimuth Length (m) No. of Samples

CH-22 474476 5827978 324 30 13 13

CH-23 474523 5827959 324 207 17 17

CH-24 474518 5827942 324 203 2 2

CH-25 474514 5827941 322 215 9 10

CH-26 474498 5827965 324 29 7 7

CH-27 474491 5827976 323 26 4 4

CH-28 474503 5827974 323 27 13.8 16

CH-29 474497 5827966 323 206 4 4

35


Table 9.2 2015 Channel Results Summary

Channel ID From (m)

To (m)

Length (m)

Li2O (%)

Cs2O (%)

Ta2O5 (ppm)

Nb2O5 (ppm)

SnO2 (ppm)

Rb2O (%)

Zone Sampled

Channel 22 0 13 13 3.21 0.062 111 43 51 0.19 UIZ/LIZ

including 0 6.2 6.2 4.21 0.023 51 28 39 0.07 UIZ

including 6.2 13 6.8 2.29 0.098 166 57 62 0.30 LIZ

Channel 23 0 17 17 4.71 0.017 49 13 33 0.05 UIZ

Channel 24 0 2 2 4.20 0.036 111 77 52 0.16 UIZ

Channel 25 0 9 9 3.91 0.057 86 47 74 0.27 UIZ

Channel 26 0 7 7 4.69 0.018 51 13 30 0.02 UIZ

Channel 27 0 4 4 4.59 0.035 67 22 23 0.05 UIZ

Channel 28 0 13.8 13.8 2.49 0.036 108 56 131 0.32 LIZ/UIZ

including 0 11 11 2.29 0.040 114 59 68 0.34 LIZ

including 11 13.4 2.4 3.59 0.020 71 40 63 0.23 UIZ

Channel 29 0 4 4 3.35 0.026 52 36 86 0.11 UIZ/WZ

including 1 4 3 4.40 0.024 54 36 100 0.08 UIZ

36


10 DRILLING Four phases of drilling have been completed on the Property since 2013. Table 10.1 provides the

collar information for all four phases of the drilling program. Figure 10.1 illustrates the location of the

drill collars.

10.1 2013 DRILL CAMPAIGN

During the period February 19 to March 3, 2013, HLM completed a 6-hole diamond drill program,

totaling 955 m, as a follow-up to the high-grade mineralization defined in the UIZ, LIZ, and CIZ zones

during the 2012 Channel Sample Program. The objectives of the drill program were to determine the

orientation, thickness, and zonation of the pegmatite and to refine the mineralogical characterization

of these zones by better establishing the Li, Ta, Rb, and Cs potential.

Haveman Brothers of Kakabeka Falls, Ontario was contracted to provide camp logistics for the drill

program. A 10-person winter camp was established next to the winter road 25 km northwest of the

North Spirit Lake community. Element Drilling Ltd. of Gimli, Manitoba was awarded the diamond

drilling contract. Drilling was completed using a skid mounted Boyles 37 drill using NQ (47.6 mm)

rods for all holes. A D6 Caterpillar moved the drill from camp to the first drill site and between holes.

Drill core was geologically logged and tagged for sampling in the Core Logging Facility at the

campsite.

Under HLM’s QA/QC procedures, the diamond drill contract specified NQ-sized drill core providing a

47.6 mm diameter sample. The drill holes were oriented perpendicular to the strike of the pegmatite

and drilled continuously across it.

Full disclosure of the results from the 2013 drill campaign was provided in the previous technical

report (McCracken, 2014).

37


Table 10.1 Drill Collars

DDHNo Date Drilled UTM Zone 15N (NAD83) Collar Orientation Metres Drilled

Start_Date End_Date Easting Northing (masl) Azimuth Dip Start End

Ph

as

e I

PL-13-001 20/02/2013 03/03/2013 474,558 5,827,832 319.5 20 -45 0 213.3

PL-13-002 22/02/2013 24/02/2013 474,451 5,827,832 323.2 30 -45 0 191

PL-13-003 24/02/2013 25/02/2013 474,421 5,827,963 327.6 30 -45 0 104

PL-13-004 25/02/2013 27/02/2013 474,492 5,827,908 325.9 30 -45 0 167

PL-13-005 27/02/2013 28/02/2013 474,526 5,828,046 320.8 210 -45 0 161

PL-13-006 01/03/2013 02/03/2013 474,608 5,827,944 316.6 210 -45 0 119

Total metres drilled 955

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